Continued Ethereum Price Drop Might Be Result of ‘Ghost of ETH’s Past’

Ethereum [ETH] Circulating supply has fallen dramatically since the long-awaited merger. According to data from Ultrasound Money, the supply of leading cryptocurrencies has increased by only 5,000 and an annual inflation rate of 0.19% since September 15.

Data from the same source revealed that if the Proof of Work consensus mechanism was still powering ETH, the supply within it would reach 98,000. In addition, its inflation rate would be 3.78% over the same period. After the merger, the network eliminated the need for miners to verify transactions on the network and the rewards paid to them.

Many believe that with the pre-merged ETH shutdown until the Shanghai upgrade and the miner’s reward reduction, post-merger ETH will experience reduced selling pressure. However, this was not the case. Since September 15, the price of ETH has fallen by 23%, according to data from CoinMarketCap.

Miners Accounting

According to IntoTheBlock’s compromise In a new report, while the continued decline in the price of the major alt is partly due to a corresponding decline in the broader cryptocurrency market, “miners may also be partly responsible for the recent increase in selling pressure and lower prices.”

IntoTheBlock found that miners’ reserves in Ethereum had been constantly declining prior to the merger. Since the merger on September 15, miners’ reserves on the Ethereum mainnet have fallen by 16%, from $124 million to $92 million. According to the report, this drop indicates miners’ sales of 17,000 ETH since the merger.

Source: IntoTheBlock

A look at Miners Netflow on the Ethereum mainnet revealed some significant ETH sales over the past three months. These sales contributed to the continued low prices of the flagship variant. According to IntoTheBlock, in the past three months there have been two separate periods where the amount of ETH leaving miners’ addresses has exceeded the amount of ETH sent to them.

The first sale took place on September 4 and totaled $18 million. The second was for $16 million, and it took place on the day of the merger. At the time of publication, Miners Netflow posted a negative value indicating that ETH continued to leave miners’ addresses, especially as former miners on the Ethereum network searched for new homes.

Source: IntoTheBlock

According to IntoTheBlock, after the merger, unsurprisingly, mining activity on the Ethereum mainnet dropped dramatically. On September 21, it was just 0.1%.

Interestingly, while miners no longer serve a purpose on the Ethereum network, they control a massive amount of ETH over their reserves, data from IntoTheBlock reveals. This figure amounted to $84.95 million at the time of this report.

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